Friday, September 18, 2009

Corporate Murder?

Trafigura is one of the leading oil traders in the world. However, like most oil traders it has hardly been immune from controversy. Over the years, several such companies such as Marc Rich & Co. and Glencore have been accused or implicated in various bribery scandals and the accusation that they assisted Saddam Hussein in avoiding UN sanctions through the so-called "topping-off" scandal.

So far, so unsurprising. Oil trading is a secretive and incredibly lucrative business, and beneath the shadows, rumours of industrial scale corruption have circulated for years. Most of the leading oil producers: Venezuela, Russia, Saudi Arabia, Iran, Kazakhstan and now Equatorial Guinea are hardly models of Jeffersonian democracy.

The allegations made against Trafigura are, however, even more vile. Put simply, the allegation is that the company bought partially processed hydrocarbons, highly sulphurous Coker Petrol, and- using an extremely caustic process- they were then able to transform this into usable product. The problem was that this left a highly caustic residue in the bilges of the ship used to transport the product. When an attempt was made to unload this by-product in the Netherlands, it became clear, according to sources in Rotterdam, that the product was so toxic that it would need special handling. That handling would be so expensive as to certainly eliminate the profit obtained from the processing. However, it would also be illegal to export the product outside the European Union.

Nevertheless, the ship next docked in Cote d'Ivoire and what Trafigura describe as "slops" were unloaded in Abidjan, Within a very short period of time a large number of Ivorians reported serious burns, breathing difficulties and indeed several agonising deaths. Over 30,000 Ivorians raised a class action against Trafigura for their injuries.

The case is still sub judice, and Trafigura continues to deny liability. However they have been forced to make ex gratia payments following the publication of internal e-mails that undermine a substantial proportion of Trafigura's case.

The legal case will need to be completed, but to my mind this is not simply a matter for the civil courts. If it is proven that Trafigura knowingly dumped this toxic waste in Cote d'Ivoire, then this is a case of murder.

The company should, in my view, face a criminal investigation. If Nick Leeson could go to gaol for securities fraud, it seems to me that those responsible for this horrific incident should face criminal prosecution. If it becomes clear that the whole culture of the company itself is implicated, then the company should be liquidated and such wealth as remains should be placed in a trust fund to support the horribly burned, blinded, widowed, orphaned and wholly innocent people of Abidjan who were caught up in a crime.

In other news: Conservative Front bencher, Lord Strathclyde resigned from the board of Trafigura yesterday. As a member of the board he may be reflecting upon his actions over the years since this scandal first occurred.

Unrelated information: Rt. Hon. Alan Duncan MP, another Conservative front bencher, made his fortune as an oil trader, first with Solomon Brothers and later with Marc Rich & Co.

Mr. Marc Rich was convicted and subsequently controversially pardoned by President Clinton for his role in bribery and illegal dealings with the regime of Iran.

2 comments:

Anonymous said...

Marc Rich was indicted but he was never convicted. He fled the US before there was a trial.

Cicero said...

I don't see that that makes a jot of difference: It still took a Presidential pardon to clarify his position. You don't need a pardon if you are innocent.